Obama’s Failed Central Planning

| November 20 2013
Mike Kapic

Many national economies are having trouble these days as they are either slowing down or not expanding. Remember, the only way to a successful economy is through continuous expansion. Two of the largest in the world, the United States and China, are having very basic structural problems that are threatening their futures if they are not addressed soon. One is run under a Communist quasi-market system while the other is parading as a republic but has morphed into a welfare state.

Many other countries around the world are having similar issues. Looking at Europe, we’ve witnessed the demise of Greece, Ireland, Spain, Italy, and France, as the southern EU economies sink and falter. Their statist governments struggle shifting between austerity and continued central planning. The northern economies of Germany, England, and Sweden are weakening due to the effects of poor world markets and the bailing out of the South. So what’s causing these problems?

It comes down to the progressive ideology that has shifted many economies toward socialism and communism over the last century. The progressive idea that permeates statist governments is that they can do more for people through controls than the free market can do with its random nature. Legislating or forcing the masses to live by defined standards of the elite few is the problem, according to most economists.

The statist idea is that the masses don’t know how to take care of themselves (the children) and the few (the parents) must instruct and provide for them through redistribution of innovative wealth. To the elite, this is called benevolent autocracy, but to the masses it is called oppression and is demoralizing to the nature of humans. It is ungodly and very much what Marx and Engels preached. In 1776, the masses in the U.S. declared their wish to be independent, self-reliant, and free to govern themselves. Today, there are a controlling few who seek the power to instill the belief that central planning will resolve the people’s struggles. And the sound of utopia to some is irresistible.  The opposite is the historical fact.

After 30 years of a single child per family policy, the Chinese planners are having second thoughts. This policy was introduced thirty years ago because it was thought to be easier to handle than solving the actual problems that confronted the fast rising country: a growing economy with many social issues such as poor medical care, inequality of wealth, and invasive pollution. It seems the economic planners have now determined that slowing the population growth artificially to stave off societal issues is leading to a disastrous economic result: a shortage of workers as the population ages.

Since 2000, China’s economy has consumed most of its available labor, resulting in wages sky rocketing. This was predicted by free-market economists as investors began searching other countries for manufacturing profits. And while the planners were enforcing the one-baby rule, through abortions and sterilizations as needed, they were also pushing workers from the country’s agriculture plots to the big city so they could help produce goods for trade. China needed cash. The farmers were told to give up their plots and move permanently to the city and industrial jobs. The people moved, but resisted giving up their plots, hanging on to them as insurance in case of industrial layoffs. Here’s an economic example of unintended consequences that was understood by the masses but not the central planners.

In Switzerland, government planners have recommended to voters that they approve a law that would cap the top wage of private companies to twelve times the lowest wage paid. This would, the planners argue, control inflation and make pay equity fairer. But there was nothing about where innovation might come from. Another example of planning gone awry arose in France recently when planned price controls on eggs were lower than the costs to produce them. Farmers, understanding the concept of supply and demand, began destroying their eggs in an effort to force the price up. They weren’t as dumb as the state planners.

People around the world, as evidenced by the stories of these countries, have an innate understanding of the economics of supply and demand. The big hearts of the central planners drive their decisions rather than the logic of economic realists of the masses. If they had listened to Hayek and the other Austrian economists, the planners would have understood what the masses knew intuitively.

Several of the architects of the new ACA law or obamacare, have come out publicly to say that during their design of the system, they didn’t think so many insurance policies would be canceled, or that the protected but directed insurance industry, would raise premiums so much.

China has lost a whole generation to the mistakes of its planners, inflicting future economic pain on its citizens. The poultry farmers in France struck out against central planners with the truth of economics.   Obamacare has become the most obvious example of how central planning by an elite group can create not a solution, but chaos, resulting in damaging the masses. These three incidents aren’t even the tip of the iceberg.

This is not rocket science. But liberals make controlling other people’s lives the goal of theirs and in the process, convolute a simple solution into a bureaucratic quagmire of alligators and swamps. Argue with me that the thousands of pages of regulations for obamacare or taxes serve a just purpose. Argue that the Education or Energy Departments have successfully fulfilled their mission statements. I dare you.

So why continue with this insanity? Liberals continue to beat the dead horse while hoping for a different outcome. Doesn’t happen, does it? The freedom to choose has always been the best elixir for what ails an economy. Join the Convention of States for the ultimate solution: take away Washington DC’s power by amending the Constitution through Article V. Allow us to self-govern again.

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“The Food Stamp Program, administered by the U.S. Department of Agriculture, is proud to be distributing this year the greatest amount of free Meals and Food Stamps ever, to 47.5 million people as of the most recent figures available in April 2013.” Meanwhile, the National Park Service, administered by the U.S. Department of the Interior, asks us “Please Do Not Feed the Animals.” Their stated reason for the policy is because “The animals will grow dependent on handouts and will not learn to take care of themselves.” Unknown

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